This document discusses the measurable benefits of effective internal communications within organizations. It provides evidence that internal communications can improve employee job satisfaction, morale, productivity and commitment. Strong internal communications are also linked to increased business performance, higher quality and revenues, and reduced costs from issues like absenteeism and defects. The document cites several studies that found organizations with more engaged employees through better internal communications experienced higher retention rates, productivity and financial performance.

1. MEASURING INTERNAL
COMMUNICATIONS
Better Companies through Better Communication.

2. Institute for Public Relations
Report Excerpts
• Employee/Organizational
Communications
– By Bruce K. Berger, Ph.D.
University of Alabama
– November 17, 2008
» http://www.instituteforpr.org/topics/employee-organizational-
communications/

3. Measurable Benefits
Value of Internal Communications
• Many would agree with Harris and
Nelson’s (2008) assertion that
internal communication is:
– An essential aspect of
organizational change
– “The key variable in almost all
change efforts, diversity initiatives
and motivation.”
» (Harris and Nelson, p. 95)

4. Measurable Benefits
Driver of Business Performance
• Some even argue that internal
communication is the most
“fundamental driver of business
performance”
» (Gay, Mahoney & Graves,
2005, p. 11).

5. Measurable Benefits
Employees Thrive
• Effective internal communications help
– Increase employee job satisfaction
– Morale
– Productivity
– Commitment
– Trust and learning
– Enhance quality, revenues and earnings

6. Specific Examples
Driver of Business Performance
• Employees who are disloyal to their
organizations, or lack commitment to helping
organizations achieve their goals, may cost
business $50 billion per year in:
– Quality defects
– Rework and repair costs
– Absenteeism
– Reduced productivity,
– Alvie Smith, former director of corporate communications at General Motors
(cited in Cutlip, Center & Broom, 2006).

7. Measurable Benefits
Improved Performance
• Improving the quality, adequacy and timeliness
of information that employees receive about
– customers,
– the organization or
– their own work
• Can improve their individual performance by
as much as 20-50 percent
» (Boyett & Boyett, 1998)

8. Internal Communications’
Big Impact
• More than 80 percent of
employees polled in the US and
UK said that employee
communication influences their
desire to stay with or leave an
organization.
• Nearly a third said communication
was a “big influence” on their
decision.
» (Burton, 2006)

9. Measurable Benefits
Most Admired vs. Least Admired
• The 200 “most admired” companies spent more
than three times as much on employee
communications as the 200 “least admired”
companies.
» (Seitel, 2004)

10. Measurable Benefits
Links to Productivity
• Employees’ satisfaction with
communication in their
organizations is linked to
– Organizational commitment
– Productivity
– Job performance and satisfaction
– Other significant outcomes
» (Gray & Laidlaw, 2004)

11. Measurable Benefits
Retain Employees
• Organizations with engaged and
committed employees
– were 50 percent more productive
– than those organizations where employees
weren’t engaged.
• In addition, employee retention rates
were 44 percent higher in organizations
with engaged and committed
employees.
» (Izzo & Withers, 2000)

12. Measurable Benefits
Retain Employees
• The cost of replacing an “average”
employee is nearly 50% of annual
salary.
• Losing a highly-skilled or experienced
employees ups the ante to 150%.
» Paulson Training
12

13. Measurable Benefits
Sustained Success
• Positive communication climate and
effective employee communication
– strengthen employees’ identification with
their organizations,
– contributes to an organization’s financial
performance and sustained success.
» (Smidts, Pruyn & van Riel, 2001)

14. Measurable Benefits
Industries Thrive or Die
• Decades ago, Sears Roebuck found that creating a more
compelling place to work for employees led to
– a significant increase in employee attitude scores
– customer satisfaction scores and
– revenues
» (Rucci, Kim & Quinn, 1998)

16. Measurable Benefits
Industries Thrive or Die
• Starbucks, Limited
Brands, Best Buy track
engagement.
– Best Buy knows the value of a
0.1% increase in engagement
at particular store
– That value equates to more
than $100K in store’s annual
operating income.

17. Measurable Benefits
Increased Market Values
• A significant improvement in
communication effectiveness in
organizations was linked to a
29.5 percent rise in market
value.
» (Watson Wyatt, 2004)

18. Measurable Benefits
Build Community and Trust
• Effective communication facilitates
engagement and builds trust.
• Both critical ingredients in strong, viable
organizations
» (Grates, 2008)

19. Measurable Benefits
Better Companies through Better Communication
• Companies with highly effective
internal communications
experienced 47% higher returns to
shareholders over companies with
least effective communications.
» (Tower Watson 2009/2010
Communication ROI Study
Report)